Week Ending 04_04_2025 Stock Market Recap

The market had us using four letter words this week like… SELL and CASH…. How so? TUNE IN TO FIND OUT!

Episode Transcript

(00:34):
Hello and welcome to
this week's edition of the Big Money Report. I'm
your host, David Boothe, President Financial Advisor at BIG Investment
Services. That's B-I-G, Boothe Investment Group.
We're a full-service financial advisory based out of Dover, Delaware, serving
clients all across America. And you

(00:56):
can read all about us at abigplan.com. That's www.abigplan.com. I
put the show together once a week just to give you a recap of the week behind and
a peek at the week and weeks to come, trying to keep
you up to speed with you and your money. And we're glad you're with us today. It
is Friday, April 4th, 2025. Ton of shout

(01:17):
outs, man. Shout out to Jody, Brian, Ray, Aaron, Rip, Frank.
All the folks that tracking with us on social media and
Facebook and all that sort of thing. Hey, we just appreciate everybody tuning in
and staying up to speed on what is going on with you
and your money. And that's why we're here doing this today. So let's go ahead and jump into
it. Look, before I even get started. Let me just say

(01:38):
this, okay, because it was just a hellacious week
on Wall Street this week. One of the worst I've seen in my career. You
just don't see the market drop this much this fast. It's really shocking. We'll
talk all about it here in just a moment, but let me let you know this. We're
doing great. We are absolutely doing great. You know,
almost all of our models were positive on the year as

(02:00):
of Thursday, and they just barely dipped into the red here
on Friday. The most aggressive models are down on just
a couple percentage points more, not much. But let me tell you something, the
S&P 500 is down 14%. The NASDAQ is down 19%. And
we just, just barely broke below flat
on the year as of today. I mean, just today alone, the S&P was

(02:23):
down 6%. We were down half as much. So
let me just tell you, you're doing fine. And I'll tell you why in
a moment, but you're doing just fine. So take a deep breath.
I know a lot of stuff's going on. There's a lot of fear out
there. Take a deep breath, relax, because you're
doing okay. So let's talk about the markets. They're

(02:44):
not doing so okay. Dow Jones down 7.8% on the week. The
S&P 500 down 9% this week, the
NASDAQ composite down 10% this week, and the Russell small caps
down 9.6. Taking a look at the
volatility index, as you might expect, it just was right
up through the roof this week. It just was off the chain. It

(03:07):
was up 109% on the week. It
was up 50% just today. VIX exploding up at around 45 on
the VIX. We'll talk about that too. Long-term bonds
as measured by the TLT, they were up 3% this week. So
long-term bonds doing their job, providing a little bit of a cushion there.
There's no need to really go through the sectors because they all got decimated. The

(03:29):
only thing that didn't get decimated this week was consumer staples. That's
soup and cereal, right? Your food and soap and toiletries,
things like that, things that people need every day. You might recall, we
were talking last week, I said one of the things I didn't like was that the
defensive areas of the market, like utilities and consumer staples,
had not rolled over yet, but they will. If we're in

(03:52):
a bear market, they're going to eventually cave. Well, staples
caved today. Here on Friday, they were down 4.3% on the day. They
did finish down 2.5% on the week, but we finally started
seeing the defensive areas of the market give up
the ghost, and they really started to get hammered as well. No
need to go through all the details. They're all down, and all down a lot.

(04:15):
Gold was only down 1.5% this week. Silver, which
is a lot more industrial uses, down 12.6% on the week. They got
hit very, very hard. Okay,
so I know you've not been living on the rock, you know what's going on,
but let me just tell you about what's going on with your money first. If
you recall last week, I was talking about the month end indicator

(04:37):
that I follow so closely. And I said Friday last
week that it would take a miracle for it to get back above that
line in the sand by the end of the day on Monday. I did not think it was gonna
happen. And come Monday and trading, it was clear it wasn't gonna
happen. So I started selling on Monday. I
started selling on Monday and man, did we sell. I sold

(04:57):
quite a bit of stuff on Monday and I sold a whole lot of stuff on
Tuesday. Between the two days, we raised up approximately, depending
on the model, about 20% in
cash in those two days. So we sold
Bank of America, Devon Energy, Diamondback Energy,
the S&P Biotech Index, Comcast. I

(05:19):
trimmed CrowdStrike, Shopify, cut them down, cut
a third out of those. I trimmed the gold investment, right? Look,
we had Kinross Gold. It's been on fire. It's been doing great. Well,
we sold on Monday at $12.60. It finished the week down
5.6% at $11.80. I just trimmed everything. I just sold like
crazy, like a madman. We really took a lot of

(05:41):
money out of the market between Monday and Tuesday. And
the market was stable both those days. Things were actually going OK.
But that month end indicator broke. And I told you,
I talked about the newsletter. I talked about it on the podcast coming into this
year. We were not going to monkey around this year. I
didn't trust the market coming into this year. Look, I thought middle of

(06:02):
last year, we were headed towards a recession. And then when the election happened,
the market ripped higher. I felt that the wealth effect created by
the market coming up so much may be delaying recession
to 2026. But nonetheless, I thought the market was expensive. I didn't trust it. And
I said, we're not going to play games. If the indicators fail
me, I'm going to set my opinions to the side and

(06:24):
I'm going to react accordingly. And that's what we did. That's what we
did. We raised up a bunch of cash and then came Wednesday.
and Wednesday afternoon, 4 p.m., President Trump announced
the tariffs. Now look, folks, a couple things. First of all,
after I raised all the cash, I contemplated putting on a short. I
thought about shorting the market. Shorting the market is when you

(06:45):
can make money on the market going down. As a matter of fact, one
for one, market goes down 1%, you're up 1%. I
thought about taking that 20% in cash and shorting the market, but I was talking to
folks there at the office, Daniel and whatnot, and Christina and everything, and I
said, look, here's the problem. This tariff issue is a binary
event. It's just too binary, right? There is a 50% chance

(07:07):
that the market was going to like the tariffs. And if
it did, it would have ripped higher folks. We could have easily be
talking about a market that was up 10% on the week instead of
down 10% on the week. And if that happened, the short would have just blown
up. It would've gotten his teeth kicked in. I didn't want to go down that road, right?
So we just kept the money in cash. I didn't short the market. That

(07:28):
might change going forward. We'll talk about this in a minute. But anyway, the announcement came
out and folks, I'm gonna tell you something. These tariffs might be a lot of things. Reciprocal
is not one of them. I'm appalled. I'm shocked. My
mind is blown at this Mickey Mouse
mathematics that this administration used to come up with
these tariffs. And look, I know I sound pretty harsh. And listen, let me tell you something. I

(07:50):
fully support, I fully support coming against
every country on the world that's been taking advantage of us for decades because there
are folks, they are sticking it to us. Make no mistake
about it. They're sticking it to us and it needs to be fixed. Okay. I
champion that idea to fix this. I also champion the
idea of scaling back government. It's over bloated. Everybody knows

(08:12):
it. It's disgusting. The amount of waste is happening there. It needs to
be streamlined and trimmed down and made more efficient. I
support these efforts. Absolutely support them because
we need to. We're broke. We are broke and it's getting worse. We
have to fix the debt spiral that we're in. Okay. That
said, this is insanity. These tariffs were absolute

(08:32):
insanity. Let me give you one example. Let's take Vietnam,
okay? Under the first Trump administration, we all came to
the realization that America and China are no longer friends, right? And
not only did Trump put tariffs on and kind of start some back and forth with
China, the Biden administration maintained those tariffs, right,
and maintained the same footing that Trump began in his first

(08:54):
term. So what did companies do? They did what was asked
of them. They got out of China. They took their business, they
shifted their supply chains to places like Indonesia, Malaysia, Vietnam.
They spent billions of dollars to set up new infrastructure and
facilities. They trained Vietnamese how
to sew shoe soles onto sneakers and how

(09:15):
to make bad furniture and all kinds of stuff like that. Okay, that's what they did. Just
so you know, Vietnam has a tariff against United States imports,
stuff that we're sending to Vietnam. They've got a 5.1% tariff, 5.1, okay? Do you
know what tariff we put on Vietnam? 46%, 46%. Now

(09:37):
let me tell you how they came to this conclusion, how
they got to this math. They didn't look at the percentage of tariffs. What
they did was they went throughout the world and they looked at the trade deficits,
how much money in goods and services is
Vietnam sending us, and how much are they taking from
us? They took the numbers, $136 billion. Vietnam

(10:00):
sends the United States of America annually, $136 billion in goods. And
they're taking $13 billion, OK? It's a small, poor
country, folks. Their GDP is only $400 billion total. That's
their whole GDP. And we're $130-some, $40-some
billion of that. Anyway, they took this difference. And
they said, well, golly dang. they're only taking from us 10% of

(10:21):
what we're taking from them. That's a 90% difference.
We should put a 90% tariff on them. But you know what? We
have a heart. So we're gonna cut that in half and we're gonna make it
46%. What kind of mathematics is that? How in the world
do you call that reciprocal? You can't expect a small

(10:42):
little tiny country with 400 billion dollars of GDP to
spend the same amount of money with America whose GDP is
$4.5 trillion. I mean, come on. That is
insanity. And it was across the board that way. And you
know what? The market reacted accordingly. It
absolutely crashed. It rolled over hard.

(11:05):
Wednesday night, the futures just absolutely plummeted. That
carried right into the day on Thursday, and it even worsened
here on Friday. Now, a few things, folks. I
told you maybe last week or the week before, I said, I think the
Trump administration wants a recession. And I knew it was going to be controversial to
say so. But understand something. There's a couple of really big things

(11:26):
they want to see happen. They want to see the 10-year yields come
down. And guess what? It came down this week. It came down hard.
In the middle of January, the 10-year Treasury yield was
4.8%. We finished the day at 3.8%. It's come down hard, which,
by the way, let me just pause here. If you've gotten
a mortgage in the last couple of years, if your kids have bought homes

(11:48):
in the last couple of years and they're dealing with these six and a half, 7% mortgages,
now's the time to keep your eyes peeled. Okay? Keep
your eyes peeled. Rates are likely going lower and
we could probably see mortgages in the fives sometime
in the near future. So just keep your eyes peeled for that. Keep watching for
that. Anyway, I thought they were just open

(12:11):
to having a recession. Now I'm starting to think they're trying to actually
cause it. And I'll tell you this, this is going to sound crazy to
you, but I saw with my own eyes, I don't subscribe
to the social media platform, but it was sent to me and I went on and
I looked at it, saw it with my own eyes. President Trump posted on
social media, he reposted someone else's message, That

(12:33):
said, Trump is playing chess while everyone's playing checkers. He
is trying to crash the market to bring down interest rates so America can
refinance its debt. President Trump reposted that
message to his social media account. I think
This is the game plan. And if you listen to Scott Bessett, the secretary treasurer, look,
I've told you guys, they've been talking about pain. Stay

(12:54):
bare with us. We're going to be some pains, be a rough road. Bessett just
continues to harp on the 10-year yield. They want it lower, lower, lower.
And look, they're not going to get it from J-PAL. J-PAL spoke this
week. I think it was this morning. And expect no
help, folks. Expect no help from the Federal Reserve. They
are in no way interested in lowering rates anytime soon.

(13:16):
It's going to come. Their hand's going to get forced. They're going to have to lower it if
the economy continues to deteriorate. But at this point in time, they
have no inclination whatsoever to lower rates
anytime in the near future. They're concerned about the inflation aspect
of tariffs. And look, there is going to be an inflation aspect
of tariffs, but keep this in mind. That's a one and done. It's going to

(13:36):
push prices up higher suddenly, and then that
stops. It's not as ever escalating situation. But
I do not see the Fed cutting rates ahead of
that. I want to see that pricing adjustment happen before
I think they start to contemplate cutting rates. So you have no protection
from J-PAL and you don't have any protection from the Trump administration. They

(13:58):
do not care about the stock market. They've come right out and they have said
it. So hang on right now. I
told you coming into this year, told you middle last year,
I thought recession was possible in 2025. I changed that outlook
to maybe 2026. That's off the table now. I
think we're heading into it. I really do. I think my base case right now,
my expectation is that recession hits us this

(14:21):
year. There's too much fear. There's too much throttling back, way
too much uncertainty for corporate America. and you look at the sentiment indicators and
everything else, I just think that it's almost a given that this is the direction
we're heading. We're going to head into a recession in my opinion. Okay. Now,
what does that mean? It means this, the market's down 17% from
its high right now, down 14% on the year. And you think, oh

(14:42):
gosh, it's been horrible, David. It's been a bloodbath. It's been terrible. The
market's just awful, so it's gotta be close to being over. And you know what? A
lot of folks are thinking that. Do you know retail flows? That's
folks that are doing it on their own, regular individuals that are
buying stocks in their accounts. Retail flows were through
the roof on Thursday. People were buying stock. Retail investors are

(15:03):
buying stock. Markets won't finish going down
until a retail investor throws a towel in, okay? Retail investors usually
always last to the party. So what does that mean? It means
the market can go a lot lower. When you have a
recession-driven bear market, you
need to expect the S&P down not 17% from its high, but

(15:25):
35 or more, 30 to 35 at the minimum, at the
minimum, and maybe a bit more than that. So if
that's where we're headed, this may just be now
getting started, OK? It just may now be getting started.
So again, the good news is you're hardly down at all
right now. You're down like a couple percent at the most. And the

(15:47):
market's down 14 year to date. So we're in a really good
position where we sit at the moment. But I do think that recession
can unfold. I think the market can experience a lot more
pain. Now, a couple of things. Normally, recession bear
markets don't start like this. It's not a cascading waterfall.
It's usually just starts to roll over and work its way down. This

(16:09):
looks like COVID. It looks like Brexit. It looks like
a shock to the system that can turn around and rip
right back again. But listen, the tariffs are just one
part of the story. There's weakening economic data. There
are big layoffs going to be taking place within the federal government and
reduction in spending. There's tons of uncertainty. There's just

(16:29):
too much to expect this thing to turn on
a dime and rip higher. That said, it will rip higher. because
the biggest rallies, the biggest rallies you will see in
your life come in the midst of
bear markets, in the midst of bear markets. So let
me just give you an example. So like, so one day next week, maybe

(16:50):
there's a deal with China and TikTok, maybe there's a easing
of tariffs with some of our trading partners, and this market can
turn and it can be up five, six, 7% in
a day or in a few days, and you're like, whoa, it's great,
it's over. It's all sunshine lollipops. And
retail investors will continue to get caught up into that. And

(17:11):
then the market, it's very cruel. It will beat
them over the head with a club and go right back
down again until they finally give up and nobody
wants to buy anymore. That's how it works. Big rallies, they
get shot down hard and nastily, and
eventually everyone just throws in town and they give up. Okay, they don't buy, they stop buying

(17:31):
altogether. So I'm just laying out what
these things will look like if that's where we're headed. And there's nothing
for certain says that's what's going to happen, but I think the odds are extremely high
right now. I'll put them 80 north of 80% that we're going to slip into a
recession. So what's the game plan for BIG, right? Here
we are, we're sitting pretty, right? We're in really good shape. We
haven't gotten punched in the face like everyone else has. So

(17:55):
what do we do from here? Well, it depends on the scenario. We're sitting
on this couch. I talked last week about the hedges that I was looking to put
into place. Look, I had more meetings this week with some of the top hedging strategies in
the country. I had meetings last week, meetings this week. There's a couple of
things I absolutely love in the alternative space that I do plan
on adding to the models at some point in time. But here's the problem. The
market has gotten hit so hard, so fast. 10% in

(18:18):
two days. that I no longer want
to put these hedges on because these hedges are not directly opposed
to the market. They're not shorts, they're hedges. And they're down now too.
And right now there's so many opportunities in the stock market. And
I got all this cash on hand. I think we can make more money doing
some buying, okay? Some really purposeful and well thought out

(18:39):
buying. So I'm not ready to put those hedges on. So here's the game plan.
One of a few things are going to happen. More bad news will come this weekend. There'll
be more retaliatory tariffs. You know, China put on 34% tariffs overnight.
That's why the market had such an ugly day today. If more of that happens over
the weekend and there's no capitulation from the administration, then

(18:59):
folks, you could see a crash like we haven't
seen since 1987 unfold at the beginning of the week. It's
a possibility. You could see an absolute bloodbath kind
of day in the market where the circuit breakers are kicked. What does that mean? It
means the selling pressure is so intense that they actually shut the market down
throughout the day, trying to let people cool off and calm down and

(19:21):
keep their heads about them. If that happens, we're
buying stock, okay? Because that's just, you gotta buy fear
like that. You know, go all in. I won't be doing that. I'll be working hard all
weekend long, dotting the I's and crossing the T's on our
buy list. And if we get that type of horrific move
on Monday or Tuesday, something like that, then I'm going to

(19:42):
do some buying, okay? Let's say that doesn't happen. Let's
say the market stabilizes. Let's just say it just stabilizes. We're
sitting on all this cash. I'm going to leave it in
money market, getting us some yield, 4% or whatever
in money market. And we're just going to be patient because as I said, recession driven
bear markets go down twice as much as where we are right now at

(20:04):
a minimum. I'm not ready to buy yet, folks. Things look broken to
me. Okay, third scenario, we
get a real strong bounce. That's probably going to happen anyway. We
get a real strong bounce in days or weeks to come.
If that happens, I am contemplating putting a short
on the market. Because again, I think things have deteriorated to

(20:26):
a point where it's more painful. Look, we blew through every level
of support. that the strategists that I deal with, I
deal with some of the top technical folks out there, folks you see on CNBC. I've
been communicating with them all week. There are levels in the market of
support at 5,480 actually, and another one down at 5,300, another one
at 5,151. We blew through all of them. We blew through all of them like a

(20:47):
chainsaw through whipped cream. Forget knife through butter, a chainsaw through
whipped cream. The market just slid right through them like nothing. That's
not good, okay? And I think there's more downside. So if
we get a big bounce, I will probably entertain putting
on some sort of short or hedge that will do some shorting
against the market so it can profit with

(21:09):
the market going down further. So those are the three things that
we're watching. Major crash. Dave, haven't we already had one? No,
no, not really. Major crash, maybe beginning of the
week or something like that. Stabilization, we've got a game plan for that.
Strong, strong bounce, real strong bounce. Then I'll probably be looking
to put on a short unless something materially changes. I

(21:30):
may or may not do that. That's tricky business, right? You got to really have a high
degree of confidence that the market's going lower to do
the shorts. You have to be a little bit careful because we don't want to miss out on return
either, right? The market starts going up for good. We don't want to be sitting there
with a big short on the market. So we'll be paying real close attention to that and
discerning that very, very closely before you make that decision. But the

(21:50):
bottom line is this folks, the bottom line is this, you're in
good shape. You're in good shape. We raised up tons
of cash on Monday and Tuesday. Let's even
back up further. We took tons of money out of the US stock
market on January 3rd. We sold all kinds of stuff on January 3rd.
because I didn't trust the market. And we shifted a lot of money overseas, which

(22:11):
has done very well and held up much better year to date. And then
on Monday and Tuesday, we raised up a ton of cash. So
we got bonds, we've got cash. I think we're
in great, great shape. Not that it's not gonna be painless. It's
still gonna be a little bit of pain, but nothing like what the market's dishing out
right now. And I'm happy about that. I'm glad we're in
this position. So, Don't fret, don't

(22:34):
fear, got it under control. We're on it. We'll be
burning the midnight oil here over the weekend. We've already enacted phase
one of the game plan, right? Get money out, cash. Now
it's time to implement phase two. When do we wanna start making
some moves that can benefit us moving forward? And
how much do you wanna brace for a potential recession and

(22:55):
much bigger decline on the market, okay? Some folks say, Dave, why don't you
just sell it all on Monday and Tuesday? Put it all in cash. Because that
is like the dumbest thing that investors could ever, ever do
is to sell it all. Do you know if you take out just the one
or two best days of the year out of the stock market, if you just take
that out of the equation, it cuts your returns down like more than half

(23:16):
over the long run. You just don't do that. You don't gamble. We
are investors. We're not gamblers. We're not going to gamble
with your money by going all cash. we're going to be smart
and prudent, right? We're going to pull money out when things look
risky, and then we've got that cash ready to buy when things look
more attractive. We don't sell it all and go run on a rock, because guess

(23:36):
what? On Monday or Tuesday, if I did that, and those tariffs that
were announced on Wednesday, if they were truly reciprocal and not crazy town,
this market could be up 10% today and not down
10, and then that would have been horrific for a long-term performance. That's why
we don't gamble with your money. All right, I've gone long,
I guess, but hey, you know, it's important. A lot of stuff happening. Be

(23:58):
comfortable. Don't be stressed or fretting out there. We got it
under control. Keep tuning in. Okay. Also be on the lookout for the newsletter.
We're going to be getting out there this coming week. I've been a little busy. Didn't get a
chance to finish writing it yet. All right. So between now and next few minutes, you're thinking about your
future long-term goals, all the things you want to do with you and your money. Maybe
it is retire a little early, buy that second house. Hey,

(24:19):
talked to a client this week, buying a beach house. Good for you guys. I'm pumped for
you guys. Now you get a better interest rate. Hey, you know what your goals are.
Don't just think about it. Think big. Think B-I-G. And
Thank you for listening to this week's edition of the Big Money Report with
your host, David Boothe, President and Financial Advisor at
BIG Investment Services. For more information on BIG and

(24:42):
how you can access their planning and investment management services, visit
them at abigplan.com. That's abigplan.com. Or
call them toll free at 866-946-PLAN. That's 866-946-7526. The
foregoing content reflects the opinions of David Boothe and Boothe Investment Group,

(25:03):
Inc., and is subject to change at any time without notice. There's no
guarantee that the statements, opinions, or forecasts provided herein will
prove to be correct. Content provided herein is for informational purposes only
and should not be used or construed as investment advice or a recommendation regarding
the purchase or sale of any security. All investing involves risk, including the
potential for loss of principal. There is no guarantee that any investment plan or